Contracts - Essay Rules Flashcards
CONTRACTS
ISSUES CHECKLIST
Applicable Law
Valid K: O (Termination, Bi/Uni), A (Mail, UCC2-207, Mirror image), C (PE), No Def (DUM MUSIC)
Quasi-K
Breach: CP (AR, Ass), TtoP, Perf Disch (DAMP WIFI, MAM)
Other Issues: modification, 3P issues (TPB, assignment, delegation, novation)
Remedies: CLIRN, RRERR, TPS
Governing Law
Valid Contract
Preliminary Negotiation
Advertisements
Gov Law: UCC app to Ks for SoG (moveable, tang prop) and b/w merchants (indiv/entities who reg deal in goods of kind sold). CL govs Ks for services and r.p. [Where a sale involves both tangible prop and services, a ct will apply the dominant factor test to determine which aspects of K is dominant, and apply law (CL or UCC) gov the dominiannt aspect of the K.] H,T
Valid K: A valid K requires (1) O (2) A (3) C and (4) no form def’s.
Preliminary Negotiaiton: does not constitute an offer. H,T
An Ad is an invitation to receive offers, unless (1) ass. w/ a stated reward, or (2) the ad specifies who may accept, how acceptance is made, and is not negotiable. H,T
Valid Contract
[Preliminary Negotiations]
[Advertisements]
Offer
Termination
Lapse of Time
Death
An O req (1) an express presnt intent to be leg bound to a K, (2) cert and def terms, and (3) comm to an id offeree. U/ CL, essential terms (subject, $, quantity) mst be covered / For UCC, the essential term is quantity. H,T
Termination
Lapse of Time: [If the O specifies a term. date, the O terminates at midnight on that date.] [If the O terminates after a specified # of days, the time runs from the time the O is received.] [If the O specifies no time, the time limit is what a reasonable O’ee assumes.] H,T reas = time needed to receive, consider, and reply to offer u/ circs. In f-2-f, reas time ends when the parties part.
Death: An O term upon O’ors death, even when O’ee does nt knw of death, except for O that is an option, which is irrevocable for the period consid. was paid. H,T
Valid Contract
…
Offer
Termination
Revocation
UCC Firm Offer
Revocation: An O terminates if (1) an O’or directly comms revocation to the O’ee, or (2) the O’ee acquires reliable info that the O’or has taken definite action inconsistent with the O.
A revocation is effective when received by the offeree. H,T
UCC Firm Offer: U/ the UCC, an O to buy or sell goods is irrevocable if (1) O’or is a merchant, (2) there are assurances the O is to remain open, and (3) the assurances are contained in an authenticated writing from the O’or. Irrevocabiltiy may not exceed 3 months. H,T
Valid Contract
- Offer
- Termination
- Revocation
- UCC Firm Offer
- Bilateral / Unilateral K
- Counteroffer [CL / UCC]
CL: Gnly, an accept. is effective upon posting. At CL, acceptance must mirror the O terms, neither omitting nor adding terms. Mods to an O act as a rejection of the O and create a new O (counteroffer).
Under UCC, addl or different terms incl. in the A of an O gnrly do nt constitute a rejection unless (1) O expressly limits A to O terms, (2) when b/w non-merchants, or a merchant and a non-merchant, the A is made expressly conditional on the offeror’s consent to the add or diff terms, where these terms are a proposal for addition to the K that is to be separately accepted or rejected, or (3) when both Ps are merchants, the addition or different terms are part of the K unless the terms materially alter the a/ment or the offeror objects within a reas time. H,T
Valid Contract
- Offer
- Termination
- Revocation
- UCC Firm Offer
- Bilateral / Unilateral K
- Counteroffer [CL / UCC]
- Revival
- Rejection
Revival The offeror may revive a terminated offer. H,T
Rejection An offeree may reject an offer expressly. A rejection becomes effective when received. H,T
Valid Contract
Offer
Termination
Revocation
Bilateral / Unilateral Contract [only do for CL contracts!!]
In a Bilateral K, one pty’s promise is exchanged for the other pty’s promise. The exchange of promises renders both enforceable. H,T
In a Unilateral K, the offeror promises to perform in return for the offeree’s act. The offeree’s promise to perform is insufficient to constitute acceptance; the o’ee mst perform the act to accept the O. Starting perf. makes an offer for a unilateral K irrevocable for a reas time to allow for complete perf. H,T
Valid Contract
- Offer …. (all the Offer headings)
-
Acceptance (A)
- Silence
- Action - Bilateral Contract
- Action - Unilateral Contract
Accept. req (1) unequiv A terms, (2) Oee with power to A, and (3) comm of A.
[Silence] does not op as an A of an O, unless (1) Oee has reason to believe the O could be A’ed by silence, was silent, and intended to A the O by silence or (2) due to previous dealings, it is reas to believe the Oee mst notify the Oor if the Oee intends not to A. H, T,
[Action - Bilateral K] An O requiring a promise to A can be A’ed with (1) return promise, or (2) actual completion. Starting perf. is enough to A an O for a bilateral K. H,T
[Action - Unilateral K] An O req action to A can be A’ed with Oee (1) aware of the O, and (2) actual completion. H,T
Valid Contract
- Offer
- Acceptance
- Mailbox Rule only for Bilateral contracts
Under the mailbox rule, A by mail or similar means, properly addressed, stamped, and sent, is effective at dispatch. The mailbox rule applies only to A, and does not apply to other K events. H,T
Valid Contract
- Offer
- Acceptance
- Consideration (C)
C involves (1) a bargain for exchange (2) of legal value. “H, P was motivated to …, a detriment incurred by P, in exchange for $5, something of legal value. Thus, there was consideration.
- Illusory promise: promise to perf tht leaves perf. to promising party’s discretion, is not C. H,T
- Past Cons: Trad, past perf b4 a promise is not bargained for, or done in reliance on promise. Mdnly, some cts enforce a promise to prevent UE whn P expected compensation, & D benefitted from Ps actions. H,T
- Perf or promising to perform an existing legal duty is insufficient C.H,T
<em>CONCLUDE ON C (if none, do the below substitutes)…</em>
-
Requirements/Output K:
- Reqs K, B’er agrees to buy all it requires of a product from the S’er.
- Output K, S’er agrees to sell all it manufactures of a product to the B’er.
- C is frm the promisor suffering a legal detriment. H,T
- PE acts as C whn a pty’s promise (1) foresee induces other pty’s reliance, (2) other pty relies on promise, and (3) injustice can be avoided only by enforcing the promise. H,T
Parole Evidence Rule
U/ the PER, ev of prior or contemporaneous negotiations or a/ments that contradict, modify, or vary k’ual terms is inadmissible if the written K is intended as a complete and final expression of the pties. A merger clause (recital tht the K is complete on its face) strengthens the presumption the written doc is final. H,T parole evidence was admissible.
Valid Contract
- …
Quasi-Contract
is a remedy for a failed K, no K, or divisible K (ie do after formation if formation fails)
A ct implies a QC when there is a failed K, no K, or divisible K by implying a promise that requires the D to make restitution to the P. Elements:
(1) P confers D a measureable benefit w/out gratuitous intent,
(2) D knws or hrtk of P’s expectation b/c D had opp to decline benefit, but instead knowingly accepted it, and
(3) D unjustly enriched if D retains the benefit without cost.
H,T
Valid Contract
- Offer
- Acceptance
- Consideration
-
No Formation Defenses (DUM MUSIC)
- Duress
- Undue Influence
- Mistake - Unilateral
- Mistake - Mutual
- Unconsionability
- Statute of Frauds
- Illegality
- Capacity
No Formation Defenses
Undue Influence occurs when 1 party is dom and the other pty is dep, due to lack of expertise, experience, or diminished capacity. Gnrly, the dominant party will be held to a higher fairness and disclosure standard than in a K b/w arms-length parties. H,T
Duress means any wrongful act or threat tht deprives a pty of meaningful choice. When a pty’s a/ment results from phys duress, the K is void. When duress is a threat, the K is voidable. H,T
Valid Contract
- Offer
- Acceptance
- Consideration
- No Formation Defenses (DUM MUSIC)
- Duress
- Undue Influence
- Mistake - Unilateral & Mutual
- Misrepresentation
- Unconsionability
- Statute of Frauds
- Illegality
- Capacity
A UM by 1 pty is insufficient to make a K voidable, unless non-mistaken pty (1) knew or hrtk of mistake, or (2) hd duty to disclose fact about which other pty was mistaken. H,T
MM occurs whn both pties are mistaken as to an essential K element. Mst be a substantial difference b/w contemplated and actual deal, w/ no intent by the pties to take a risk on the K element. K is gnrly voidable by pty adversely affected by mistake. H,T
Valid Contract
- Offer
- Acceptance
- Consideration
- No Formation Defenses (DUM MUSIC)
- Duress
- Undue Influence
- Mistake - Unilateral & Mutual
- Misrepresentation (and Non-Disclosure)
- Unconsionability
- Statute of Frauds
- Illegality
- Capacity
Misrep: If a pty (1) induces another pty to enter into a K (2) asserting fraud misrep (knwn untrue info), K is (3) voidable by pty who justifiably relies on misrep. H,T
Non-Dislosure: Seller of resi prop may be liable for failure to disclose defects if (1) seller knws ohrtk of defect, (2) defct nt obvious, and S realizes B is unlikely to discover defct by ordinary inspection, and (3) defect affects property value or health and safety, and likely causes B to reconsider purchase if knwn.
Unconscionability K may be voidable whre provisions are one-sided as to be unconscionable at time K is made. Defense is applied whre 1pty hs unequal & superior bargaining power over other party. H,T
Illegality If consideration or perf u/ a K is illegal, K is illegal &unenforceable. If a K contemplates illegal conduct, it is void. If a K becomes illegal after formation, perf is discharged. H,T
